Freshworks Inc. (NASDAQ:FRSH) ranks among the 8 most undervalued cloud stocks to buy according to analysts. Analysts Remain Constructive on Freshworks (FRSH) Amid Broader Headwinds As of March 20, 2026, Freshworks Inc. (NASDAQ:FRSH) boasts constructive analyst sentiment, with 50% of analysts holding a ‘Buy’ recommendation and with a consensus price target of $11.00 indicating a 33.66% upside potential. The sentiment persists despite the fact that shares have fallen over 37% in the last six months, slight ...

Core Viewpoint - Freshworks Inc. has announced leadership changes aimed at accelerating growth and enhancing customer value by unifying its global sales organization under Ian Tickle, who has been appointed as Chief Revenue Officer [1][2]. Leadership Changes - Ian Tickle, previously Chief of Global Field Operations, will now oversee all sales, customer success, and customer experience functions as Chief Revenue Officer [2][3]. - The decision to unify the sales organization is expected to drive high-impact results, as Tickle has a proven track record of performance at Freshworks [2]. Financial Performance - Freshworks reported achieving profitability and record free cash flow generation in its Q4 and full year 2025 financial results, and it has raised revenue estimates for fiscal year 2026 [4]. - The company is reaffirming its financial estimates for Q1 ending March 31, 2026, and the full fiscal year ending December 31, 2026, as previously communicated [4]. Company Overview - Freshworks Inc. specializes in uncomplicated service software that enhances employee and customer experiences, with a focus on a people-first approach to AI [5]. - The company serves nearly 75,000 clients, including notable brands like Bridgestone, New Balance, S&P Global, and Sony Music [5].

Freshworks 2026 Conference Summary Company Overview - **Company**: Freshworks (NasdaqGS:FRSH) - **CFO and COO**: Tyler, who joined Freshworks in 2020 and previously worked at Zuora for 10 years [1][4] Key Financial Performance - **Revenue Growth**: Achieved 13% constant currency growth last year, with a forecasted increase to 14% for the current year [25] - **Operating Profit**: Projected to generate $250 million in free cash flow this year, with a strong margin profile [25][38] - **Annual Recurring Revenue (ARR)**: EX products are growing over 20%, now exceeding $500 million in ARR [26] Strategic Developments - **Acquisition**: Recently acquired FireHydrant to enhance IT Operations Management (ITOM) capabilities, complementing existing products [26][29] - **Product Portfolio**: Freshworks has a four-pillar strategy including IT Service Management (ITSM), Employee Service Management (ESM), IT Asset Management (ITAM), and ITOM [31][32] AI Integration and Market Position - **AI Capabilities**: Freshworks has developed strong AI products, including AI Agent and Copilot, which are integral to their offerings [53][56] - **Customer Adoption**: Over 8,000 customers are using AI products, with a 50% attach rate on deals over $30,000 [58][199] - **Net Dollar Retention**: Corporate level net dollar retention is approximately 105%, with higher retention rates for customers using AI products [58][73] Market Challenges and Opportunities - **AI Perception**: Concerns exist that AI may negatively impact the business; however, Freshworks asserts that AI is enhancing their offerings and driving growth [49][50] - **Customer Base**: The majority of customers are in the mid-market and low enterprise sectors, with a focus on manufacturing, law firms, and sports teams [109][110] - **Long Tail Strategy**: Freshworks is shifting focus away from small and medium-sized businesses (SMBs) to larger clients, which has resulted in a decrease in customer count [90][91] Financial Strategy - **Share Buyback**: Announced a $400 million buyback, following a previous buyback of the same amount [38] - **Cash Position**: Maintains over $800 million in cash with no debt, positioning the company favorably for growth and investment [38] Future Outlook - **Growth Strategy**: Freshworks aims to engage existing customers to increase AI adoption and expand product usage [199] - **Pricing and Packaging**: The company is cautious in adjusting pricing structures, focusing on usage and customer feedback [83] Conclusion Freshworks is positioned for continued growth with a strong financial outlook, innovative AI capabilities, and a strategic focus on larger enterprise clients. The company is actively working to enhance its product offerings and customer engagement while navigating market challenges related to AI perceptions.

Core Insights - Freshworks Inc. (NASDAQ:FRSH) is recognized as one of the 12 best beaten-down technology stocks to buy according to Wall Street analysts [1] - More than 60% of covering analysts remain bullish on Freshworks, predicting a 62.60% upside with a consensus price target of $12.00, indicating strong analyst sentiment and a positive outlook for the end of 2025 [2][8] Financial Performance - In Q4 2025, Freshworks reported total revenue of $222.7 million, a 14% year-over-year increase, with non-GAAP operating income of $41.6 million and an 18.7% margin [3] - For the entire year 2025, revenue increased by 16% to $838.8 million, with non-GAAP net income per share rising to $0.66 from $0.43 in 2024, and adjusted free cash flow reaching $223.1 million with a 26.6% margin [4] Growth and Product Development - Freshworks continues to expand its AI-driven product line with acquisitions like FireHydrant and new features in Freshservice, Freshdesk, and Freddy AI, which surpassed $25 million in annual recurring revenue [5] - The company anticipates non-GAAP net income per share for 2026 to be between $0.55 and $0.57, with projected revenue of $952 to $960 million [5] Company Overview - Freshworks Inc. simplifies employee and customer experiences through its SaaS software offerings, including Freshdesk, Freshservice, Freshsales, Freshmarketer, and Freshteam, and was established in 2010 with headquarters in San Mateo, California [6]

Financial Data and Key Metrics Changes - Freshworks achieved profitability for the first time in its history, generating record free cash flow in 2025, with a free cash flow margin of 25% [5][24][29] - Q4 total revenue increased to $222.7 million, growing 14% year-over-year on an as-reported basis and 13% on a constant currency basis [20] - Annual recurring revenue (ARR) ended at $907 million, representing 18% growth year-over-year on an as-reported basis [9] Business Line Data and Key Metrics Changes - Employee Experience (EX) business reached approximately $510 million in ARR, representing 26% year-over-year growth on an as-reported basis [21][10] - Customer Experience (CX) business ended the year with $395 million in ARR, reflecting year-over-year growth of 9% on an as-reported basis [21][16] - Device42 ended 2025 with over $40 million in ARR, with a 30% attach rate to top new EX deals [11][21] Market Data and Key Metrics Changes - Over 1,500 customers now contribute more than $100,000 in ARR, representing a 28% year-over-year growth [9] - The number of customers contributing more than $50,000 in ARR grew 23% year-over-year [26] - Net dollar retention rate was 108% on an as-reported basis, with expectations to improve to approximately 105% in Q1 2026 [25][44] Company Strategy and Development Direction - Freshworks aims to expand its EX business and monetize AI at scale, targeting $100 million in AI-driven ARR by 2028 [17][14] - The acquisition of FireHydrant is expected to enhance IT operations management capabilities and open an $8 billion addressable market [12][34] - The company is focused on integrating its product offerings to provide a unified service operations platform for IT teams [13][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained growth and profitability, projecting revenue growth of approximately 13.5%-14.5% for the full year 2026 [33][32] - The company anticipates continued demand for its EX solutions, particularly in the mid-market segment [72][73] - Management highlighted the importance of AI in driving customer satisfaction and operational efficiency [15][59] Other Important Information - Freshworks generated $56.2 million in free cash flow in Q4, outperforming expectations due to strong cash collections [28] - The company ended the year with nearly $844 million in cash, cash equivalents, marketable securities, and restricted cash [30] Q&A Session Summary Question: What factors are creating headwinds on the CX side of the business? - Management noted that the focus has been on EX, and the unification of conversational and ticketing capabilities is expected to drive faster growth in CX [39][40] Question: How should we think about the attach rate for Device42 trending? - Management indicated that Device42 is integral to the growth of the EX business and is expected to drive retention and expansion [50][51] Question: What are the expectations for Freddy AI's contribution to growth? - Management reported that Freddy AI has crossed $25 million in ARR and is expected to continue driving growth as capabilities improve [58][60] Question: How does the company view its guidance compared to previous years? - Management expressed confidence in the current guidance, reflecting strong momentum in the EX market and a clear strategy for growth [62][63]

Freshworks (NasdaqGS:FRSH) Q4 2025 Earnings call February 10, 2026 05:00 PM ET Company ParticipantsDennis Woodside - CEO and PresidentKate Skolnick - VP of Investor RelationsTyler Sloat - COO and CFOConference Call ParticipantsAlex Zukin - AnalystAustin Cole - AnalystBilly Fitzsimmons - AnalystDavid Hynes - AnalystJonathan Macari - AnalystOscar Saavedra - AnalystRob Oliver - AnalystScott Berg - AnalystTaylor McGinnis - AnalystOperatorHello, everyone. Thank you for joining us, and welcome to the Freshworks f ...

Financial Data and Key Metrics Changes - Freshworks achieved profitability for the first time in its history, generating record free cash flow in 2025, with a free cash flow margin of 25% in Q4 [5][21] - Q4 total revenue increased to $222.7 million, growing 14% year-over-year on an as-reported basis and 13% on a constant currency basis [19] - Annual recurring revenue (ARR) ended at $907 million, representing 18% growth year-over-year on an as-reported basis [9] Business Line Data and Key Metrics Changes - Employee Experience (EX) business crossed the $500 million ARR mark, reaching approximately $510 million, representing 26% year-over-year growth [20] - Customer Experience (CX) business reached $395 million in ARR, reflecting year-over-year growth of 9% on an as-reported basis [20] - Device42 ended 2025 with over $40 million in ARR, with a 30% attach rate to top new EX deals [11] Market Data and Key Metrics Changes - Over 1,500 customers now contribute more than $100,000 in ARR, representing a 28% year-over-year growth [9] - The number of customers contributing more than $50,000 in ARR grew 23% year-over-year [25] - Net dollar retention was 108% on an as-reported basis, with expectations to improve to approximately 105% in Q1 2026 [24] Company Strategy and Development Direction - Freshworks aims to expand its EX business and monetize AI at scale, targeting $100 million in AI-driven ARR by 2028 [16][13] - The acquisition of FireHydrant is expected to enhance IT operations management capabilities and open an $8 billion addressable market [12] - The company is focused on integrating its product offerings to provide a unified service operations platform for IT teams [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained growth and profitability, projecting revenue growth of approximately 13.5%-14.5% for the full year 2026 [31][32] - The company anticipates continued demand in the EX market, with a clear strategy to drive top-line growth [18][60] - Management highlighted the importance of AI as a revenue driver, with significant growth potential in the coming years [56] Other Important Information - Freshworks generated $56.2 million in free cash flow in Q4, outperforming expectations due to strong cash collections [27] - The company ended the year with cash, cash equivalents, and marketable securities of nearly $844 million [28] - Freshworks is on track to achieve sustainable GAAP profitability by Q4 of 2026 [23] Q&A Session Summary Question: What factors are creating headwinds on the CX side of the business? - Management noted that the focus has been on EX, and the recent unification of conversational and ticketing capabilities is expected to drive faster growth in CX [37] Question: How should we think about the attach rate for Device42 trending in 2026? - Management indicated that Device42 is integral to sustaining growth in EX, with expectations for continued success in larger organizations [48] Question: What are the expectations for Freddy AI's contribution to growth in 2026? - Management expressed confidence in Freddy AI's growth potential, with expectations for significant upside as capabilities improve [56] Question: How does the company view its guidance compared to last year? - Management stated that the current guidance reflects increased confidence in the EX opportunity and the execution of their strategy [60] Question: What is the strategy for penetrating the customer base with Freddy AI? - The focus is on building out agentic capabilities and prepackaged workflows for both CX and EX, which are expected to drive increased usage [84]

This presentation contains "forward-looking" statements within the Private Securities Litigation Reform Act of 1995 that are based on our management's current expectations and projections about anticipated future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. Other than statements of historical facts, all statements contained in this presentation, includ ...

Core Insights - Freshworks Inc. reported strong financial results for Q4 and fiscal year 2025, exceeding revenue and operating margin guidance, with a year-over-year revenue growth of 16% [1][5][8] - The company’s EX business achieved over $500 million in annual recurring revenue, indicating significant growth in this segment [1] Financial Performance - **Q4 2025 Results**: Total revenue reached $222.7 million, a 14% increase from $194.6 million in Q4 2024. Adjusted for constant currency, the growth was 13% [5][37] - **Operating Income**: GAAP income from operations was $39.7 million, with an operating margin of 17.8%, compared to a loss of $23.8 million and a margin of (12.2)% in Q4 2024 [5][37] - **Net Income**: GAAP diluted net income per share was $0.67, up from a loss of $(0.07) in Q4 2024 [5][9] - **Cash Flow**: Net cash provided by operating activities was $62.3 million, representing a margin of 28.0%, compared to $41.4 million and a margin of 21.3% in Q4 2024 [5][9] Full Year 2025 Summary - **Total Revenue**: For the full year, revenue was $838.8 million, a 16% increase from $720.4 million in 2024 [5][37] - **Operating Income**: GAAP income from operations was $13.2 million, with a margin of 1.6%, compared to a loss of $(138.6) million and a margin of (19.2)% in 2024 [5][37] - **Non-GAAP Income**: Non-GAAP income from operations was $178.0 million, with a margin of 21.2%, up from $99.1 million and a margin of 13.8% in 2024 [5][37] Customer Metrics and Business Highlights - The number of customers contributing more than $5,000 in annual recurring revenue (ARR) increased by 10% year-over-year to 24,762 [10] - The net dollar retention rate improved to 108%, compared to 105% in Q3 2025 and 103% in Q4 2024 [10] - Freshworks announced the acquisition of FireHydrant to enhance its IT Service Management offerings [10] - New product capabilities were launched, including Freshdesk Command Center and Freddy AI Insights, aimed at improving customer experience [10] Financial Outlook - For Q1 2026, Freshworks expects revenue between $222.0 million and $225.0 million, with year-over-year growth of 13% to 15% [8] - For the full year 2026, revenue is projected to be between $952.0 million and $960.0 million, with growth of 13.5% to 14.5% [8]

Group 1 - Freshworks Inc. (NASDAQ:FRSH) is recognized as a strong software application stock by hedge funds, with Wells Fargo maintaining an Equal Weight rating and a target price of $13, indicating a potential upside of nearly 15% for investors [1] - Recent price increases for Freshdesk plans have resulted in double-digit percentage hikes across all tiers, which could contribute an additional 3% growth for the business in FY26 [2] - Needham has a bullish outlook on Freshworks, assigning a Buy rating with a target price of $25, suggesting a significant upside potential of 121% [2] Group 2 - There is strong demand anticipated for Freshservice, Freshworks' IT service management platform, due to its user-friendly features and competitive pricing, particularly in up-market segments [3] - Freshdesk, the customer service software, is experiencing stable demand, while early adoption of Freddy AI across both platforms is expected to provide automation benefits and a competitive advantage [3] - Freshworks specializes in cloud-based SaaS solutions, focusing on AI-enabled offerings for IT service management, customer experience, and sales & marketing, serving a wide range of clients from startups to large enterprises [4]